Principles of Macroeconomics

Steven A. Greenlaw, David Shapiro

Chapter 19

Macroeconomic Policy Around the World - all with Video Answers

Educators

Chapter Questions

Problem 1

Using the data in Table $19.3,$ rank the seven regions of the world according to GDP and then according to GDP per capita.

Oluwadamilola Ameobi

Oluwadamilola Ameobi

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Problem 2

What are the drawbacks to analyzing the global economy on a regional basis?

Kaylee Mcclellan

Kaylee Mcclellan

Numerade Educator

Problem 3

Create a table that identifies the macroeconomic policies for a high-income country, a middle-income country, and a low-income country.

Riham Bassal

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Problem 4

Use the data in the text to contrast the policy prescriptions of the high-income, middle-income, and low-income countries.

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 5

What are the different policy tools for dealing with cyclical unemployment?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 6

Explain how the natural rate of unemployment may be higher in low-income countries.

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 7

How does indexing wage contracts to inflation help workers?

Kaylee Mcclellan

Kaylee Mcclellan

Numerade Educator

Problem 8

Use the AD/AS model to show how increases in government spending can lead to more inflation.

Kaylee Mcclellan

Kaylee Mcclellan

Numerade Educator

Problem 9

Show, using the AD/AS model, how governments can use monetary policy to decrease the price level.

Kaylee Mcclellan

Kaylee Mcclellan

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Problem 10

What do international flows of capital have to do with trade imbalances?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 11

Use the demand-and-supply of foreign currency graph to determine what would happen to a small, open economy that experienced capital outflows.

Kaylee Mcclellan

Kaylee Mcclellan

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Problem 12

What is the primary way in which economists measure standards of living?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 13

What are some of the other ways of comparing the standard of living in countries around the world?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 14

What are the four other factors that determine the economic standard of living around the world?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

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Problem 15

What other factors, aside from labor productivity, capital investment, and technology, impact the economic growth of a country? How?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 16

What strategies did the East Asian Tigers employ to stimulate economic growth?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 17

What are the two types of unemployment problems?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 18

In low-income countries, does it make sense to argue that most of the people without long-term jobs are unemployed?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 19

Is inflation likely to be a severe problem for at least some high-income economies in the near future?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 20

Is inflation likely to be a problem for at least some low- and middle-income economies in the near future?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 21

What are the major issues with regard to trade imbalances for the U.S. economy?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 22

What are the major issues with regard to trade imbalances for low- and middle-income countries?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 23

Demography can have important economic effects. The United States has an aging population. Explain one economic benefit and one economic cost of an aging population as well as of a population that is very young.

Kaylee Mcclellan

Kaylee Mcclellan

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Problem 24

Explain why is it difficult to set aside funds for investment when you are in poverty.

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 25

Why do you think it is difficult for high-income countries to achieve high growth rates?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 26

Is it possible to protect workers from losing their jobs without distorting the labor market?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 27

Explain what will happen in a nation that tries to solve a structural unemployment problem using expansionary monetary and fiscal policy. Draw one AD/ AS diagram, based on the Keynesian model, for what the nation hopes will happen. Then draw a second AD/ AS diagram, based on the neoclassical model, for what is more likely to happen.

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 28

Why are inflationary dangers lower in the highincome economies than in low-income and middleincome economies?

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 29

Explain why converging economies may present a strong argument for limiting flows of capital but not for limiting trade.

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 30

Retrieve the following data from The World Bank database $\quad$ (http://databank.worldbank.org/data/ home.aspx) for India, Spain, and South Africa for the most recent year available:
• GDP in constant international dollars or PPP
• Population
• GDP per person in constant international dollars
• Mortality rate, infant (per 1,000 live births)
• Health expenditure per capita (current U.S. dollars)
• Life expectancy at birth, total (years)

Kevin Simons

Numerade Educator

Problem 31

Prepare a chart that compares India, Spain, and South Africa based on the data you find. Describe the key differences between the countries. Rank these as high-, medium-, and low-income countries, explain what is surprising or expected about this data.

Banhishikha Sinha

Banhishikha Sinha

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Problem 32

Use the Rule of 72 to estimate how long it will take for India, Spain, and South Africa to double their standards of living.

Oluwadamilola Ameobi

Oluwadamilola Ameobi

Numerade Educator

Problem 33

Using the research skills you have acquired, retrieve the following data from The World Bank database $\quad$ (http://databank.worldbank.org/data/ home.aspx) for India, Spain, and South Africa for $2010-2015,$ if available:
• Telephone lines
• Mobile cellular subscriptions
• Secure Internet servers (per one million people)
• Electricity production (kWh)
Prepare a chart that compares these three countries. Describe the key differences between the countries.

Kevin Simons

Numerade Educator

Problem 34

Retrieve the unemployment data from The World Bank database (http://databank.worldbank.org/data/ home.aspx) for India, Spain, and South Africa for 2011-2015. Prepare a chart that compares India, Spain, and South Africa based on the data. Describe the key differences between the countries. Rank these countries as high-, medium-, and low-income countries. Explain what is surprising or expected about this data. How did the Great Recession impact these countries?

Kevin Simons

Numerade Educator

Problem 35

Retrieve inflation data from The World Bank data base (http://databank.worldbank.org/data/home.aspx) for India, Spain, and South Africa for $2011-2015$. Prepare a chart that compares India, Spain, and South Africa based on the data. Describe the key differences between the countries. Rank these countries as high-, medium-, and low-income. Explain what is surprising or expected about the data.

Kevin Simons

Numerade Educator